New Hampshire vs. Massachusetts - Governor Patrick proudly announced a two day sales tax holiday just in time for back to school shopping. N.H.'s Governor Lynch responded by reminding shoppers that N.H. has NO sales tax.
New York vs, Connecticutt - When the N.Y. Legislature had a plan to treat carried interest earned by hedge fund employees who commute into N.Y. as income, Governor Rell sent hedge fund managers a letter inviting them to move their offices to Connecticut. Mayor Bloomberg and Governor Patterson had to explain some basic facts of life to the dummies in the Legislature to stop it . For now.
Nevada and Arizona vs. California - Both have profitted from wealthy Californians and businesses relocating.
New Jersey vs. Delaware and Pennsylvania- Jersey has been bleeding jobs and rich folks to both neighboring states for over a decade.
We are going to see more interstate brawling because when the Bush cuts expire, state tax rates are going to be even more important than they already are. If Mass. or New York raise taxes, their neighbors rejoice. Likewise, when we raise Federal taxes, we make Europe's day.
If we look at which states are weathering the current recession best, it is states like North Dakota and Texas. Both with low taxes. Except for Nevada and Florida, our hardest hit states are all high tax and heavily regulated: Ohio, Michigan, Illinois, N.Y., N.J. and California.



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